Dielectric constants of CdTe thin films in the presence of a weak pump beam have been measured at room temperature using photoellipsometric technique in the energy range 1.5–5 eV. An anomalous peak is observed in the dielectric spectra of CdTe thin films deposited in oxygen ambient. The peak height depends on the oxygen content in the film and intensity of the pump beam. No peak was observed when the films were deposited under high vacuum (2×10−6Torr) or if the pump beam power was <25 &mgr;W. ©1996 American Institute of Physics.